Sharp drop in income for some farm systems in 2012 but
recovery ahead in 2013

10 December 2012

Newly released Teagasc estimates indicate that
Irish farm income in 2012 averaged €21,500, a drop of 12 percent
compared with last year. However, Teagasc economists indicate
that this average reduction masks very significant variations in
the change in income on individual farms. Wet summer weather
impacted particularly on farming in southern and eastern regions
where dairy and tillage are most prevalent. This had a
substantial negative impact on dairy and tillage farm incomes
which fell by a much larger percentage than the national figure
which reflects an average for all farm systems in 2012.

Teagasc presented its Agricultural Markets and Farm Incomes
review of 2012 and Outlook for 2013, at a conference in Dublin
today, Monday 10 December.

Prices for beef, pigs and tillage crops all increased in 2012.
Improved market conditions and favourable exchange rate
movements led to higher farm prices for those enterprises. By
contrast, prices for milk, lamb and cereals declined in 2012.

On the cost side there was a dramatic rise in feed use in
grassland agriculture systems in 2012, as a consequence of the
unfavourable summer weather which made grazing, fertilizer
application and silage making difficult on many farms. Tillage
yields in 2012 were also severely depressed due to abnormal
weather.

Income on dairy farms is estimated to have declined by 27
percent in 2012 to an average of €50,000. While tillage farms
are estimated to have experienced income drops of up to 20
percent following the poor year for cereal production. By
contrast, income on beef farms increased marginally as prices
for cattle remained relatively strong throughout the year.

Looking ahead to 2013, average farm incomes should recover but
not to the levels experienced in 2011. Even though further
increases in fertiliser and fuel expenditure are on the cards in
2013, feed expenditure should decline significantly compared
with 2012 due to lower usage. Prices for milk and pigs are set
to rise in 2013, while beef and sheep prices should remain
steady. The outlook for cereals prices remains highly dependent
on global weather conditions over the next six months.

Also of note is that the ending of some agricultural support
payments in 2013 will have a negative impact on income on beef
and sheep farms. Overall, Teagasc economists expect average
family farm income to rise next year but they expect the
percentage increase to be in the single digits.